Field of the Disclosure
This invention relates to the field of health insurance and, more particularly, to a system and method to estimate reduction in lifetime out-of-pocket expenses to the insured and direct cost to the insurer with an incentive-based plan to achieve a healthy body mass index (BMI) and evidence based predictive and differential analysis of relevant compound risks and incremental lifetime expenditures.
Description of the Related Art
The rising cost of insurance premiums and out-of-pocket expenses for healthcare, and an increasing population at risk with inadequate or no health insurance across all age groups, is becoming a cause of concern to governments and private healthcare industry at large. The projected cost of coverage to insurance companies based on trends in lifestyles and emerging patterns of diseases is alarming and is a serious challenge to the industry.
The Patient Protection and Affordable Care Act (PPACA) is a United States federal statute signed into law in 2010. PPACA requires health insurance companies in the United States to increase insurance coverage of pre-existing conditions, and spend 80 to 85 percent of premium dollars on medical care and health care quality improvement, rather than on administrative costs, starting in 2011. Insurance companies that do not meet the medical loss ratio standard provision will be required to provide rebates to their consumers, payable by August 1st each year, starting in 2012. Enrollees, to whom rebates are owed, will receive a premium reduction rebate check or lump-sum reimbursement to a credit or debit card account. Pursuant to National Association of Insurance Commissioners (NAIC) recommendations, the regulation specifies quality improvement activities grounded in evidence-based practices, for innovations counted toward the 80 or 85 percent standard.
Families plan for future expenses towards the purchase a home, to pay for their children's college education, vacations, and other discretionary expenses. However, most families do not plan for their out-of-pocket healthcare costs—post-employment and in retirement. This innovation provides a method and system for families and financial advisors to plan for lifetime out-of-pocket costs of healthcare, while enabling healthcare insurers to participate in the process by offering financial incentives to motivate their beneficiaries and reduce the total cost of healthcare by lowering risks associated with early onset of illness and the duration of illness.